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Luxury Outlook 2022

What Gives a Suburb Staying Power

What Gives a Suburb Staying Power?

Despite predictions that some suburban markets could collapse as city dwellers went back to the urban homes they fled when Covid-19 struck, many suburbs are thriving, poised for even greater real estate growth because of their long-lasting appeal.

For the suburbs that surround New York City—whether in New Jersey, New York, or Connecticut—that appeal is about proximity to the city, good commuter-rail service, a strong sense of place, and strong, established schools…all elements that make for a successful suburb.

Fee Sotheby’s International Realty

A shingle-style home on more than one acre in Rye, New York

Julia B. Fee Sotheby’s International Realty

Affluent Greenwich, Connecticut, “has always been a place to come to—for its amenities, its amazing beaches, its schools, its great parks,” says Joseph Barbieri, senior global real estate advisor, Sotheby’s International Realty–Greenwich Brokerage. “We’ve always been a tax haven for New Yorkers, plus we have lower taxes than neighboring Westchester County in New York.”

A new custom home stands on the site of the former Vanderbilt estate in Greenwich, Connecticut

Sotheby’s International Realty – Greenwich Brokerage

Sotheby’s International Realty – Greenwich Brokerage

“We’re also a very sophisticated town,” he says, pointing out amenities like the Greenwich Polo Club.”

Inventory was depleted in six months during Covid, says Barbieri, whose office handled the US$45 million sale of designer Tommy Hilfiger’s 22-acre spread in January 2021.

“The town had been languishing, but with Covid we were literally off to the races. Greenwich came back in a big way.”

Now if people see something they like, they just buy it, he says. “That wasn’t so prior to Covid.”

Other towns in Fairfield County, including Darien, New Canaan, Westport, and Fairfield, are also doing quite well, he says.

“In the US$1 million–to–US$2 million range, things are gone in days. We have record-low inventory in all of the towns. Every time I go to an open house, at least four or five people ask me whether I have any new listings about to come on the market,” he says.

The suburban market in northern New Jersey has also been strong.

“The first seven months of Covid were historically busy,” says Charles Oppler, CEO/managing partner, Prominent Properties Sotheby’s International Realty, which has 15 offices in northern and central New Jersey. “There was tremendous rental activity, too, because people wanted to be in much smaller buildings,” says Oppler, the 2021 president of the National Association of Realtors.

We are still seeing growth in towns with an easy commute because people will still be commuting,” he says, pointing to communities with good train service into New York, such as Montclair, Summit, and Ridgewood as well as the close-in New Jersey cities of Hoboken and Jersey City. “There is tremendous strength in both of those cities now. There was a lull during Covid, but we’re now seeing lots of growth in both.”

In Montclair, sales are up 22% over last year, up 22% in Tenafly, and up 25% in Summit, Oppler says.

In northern New Jersey, “it’s always been proximity to the city, the strength of the community, and the strength of the schools,” says Oppler. “None of that has changed.”

“Buyers are looking at functionality more than ever now,” he says. “When they’re considering three versus four bedrooms, they see that fourth bedroom as an office or a classroom.”

There is also a lot of pride in these successful suburbs. “There is a parochial hometown feel to many of our communities,” Oppler says. “When you go to the local town-fair days, they’re just packed. There is a lot of pride in these communities—this is where I live, this is where I’m going to raise my family, this is where I’m going to make lifelong friends.”

Looking ahead to 2022, Oppler envisions inventory won’t move as quickly. “I think we’ll slow down a little. But there will still be a lot of demand.”

Barbieri is also bearish about the Greenwich outlook for 2022. “We are at a robust pace of buyers coming in at all price ranges, from US$1 million to US$30 million or US$40 million,” he says.

The market in Westchester, the county immediately north of New York City, has also remained resilient. Sales are up 33% year to date, and the median price for a home is up 8% so far this year, says Mimi Magarelli, agent, Julia B. Fee Sotheby’s International Realty, who primarily covers the affluent southern Westchester communities of Larchmont, Mamaroneck, and New Rochelle.

Other Westchester communities that have remained strong during and after the pandemic include Scarsdale, Bronxville, and Rye, along with what are known as the Rivertowns along the Hudson River, she says.

Like so many great suburbs across the country, low inventory in the county is becoming a problem, down 39% year to date, she says.

“Great schools, proximity to New York City, and access to parks and public beaches” are a big part of Westchester’s appeal, Magarelli says. “People really appreciated those spaces during Covid... They discovered all these things they didn’t use because they were on the train every day.”

Prices in her area have remained fairly stable, she says. “That’s one of the beauties about living here. There are no huge ups or huge downs. That points to our stability.”

“Anecdotally, we saw a lot of inner moves and local move-ups,” Magarelli says.

“People saw it as an opportunity to stay in their community and get a bigger, better house or the waterfront they always wanted,” Magarelli says. “That points to the staying power of these communities.”

Plus, she adds, “some people are saying, ‘Let’s get out of New York City and the Hamptons and buy one great house, in Greenwich or Westchester.’”

Briggs Freeman Sotheby’s International Realty

A North Dallas home made of steel and Calacatta marble

Briggs Freeman Sotheby’s International Realty

The North Shore suburbs that line Lake Michigan north of Chicago, Illinois, including Evanston, Winnetka, Glenview, Highland Park, Kenilworth, Northfield, and Northbrook, have also fared well.

“In my experience, Winnetka is the No. 1 requested suburb from Chicago and out-of-town clients,” says Erica C. Goldman, agent, Jameson Sotheby’s International Realty. “But each suburb offers its own distinct pluses, and the best part of living on the North Shore is that you utilize all of them for dining and shopping. With all of these—Winnetka, Wilmette, Glencoe, Kenilworth—the commute downtown is manageable.”

Dallas, Texas is another metropolitan area that has seen tremendous growth in its suburbs.

“We have a business-friendly climate, and so many companies are relocating here,” says Ralph Randall, agent, Briggs Freeman Sotheby’s International Realty, who specializes in close-in suburbs like University Park and Highland Park. “We’re seeing so much relocation to this city from California and New York. It’s crazy. We just don’t have enough houses.”

They’re attracted to the amount of land and the interior square footage they can get in Dallas, he says. “Many people comment on the quality of new construction here. The strength in Dallas is the location and the individual townships,” Randall says. “It’s the town center, the municipal government, and the school district. That’s what’s driving this.”

University Park and Highland Park, for example, have their own municipal police and fire departments, he says. “The response time can be as little as two minutes.”

Other Texas suburbs that are thriving include Plano, Frisco, Southlake, Westlake, and Preston Hollow, which has “great public schools as well as 10 to 15 amazing private schools,” Randall says. “These are really well-organized communities with all of the amenities you would ever need. You don’t have to drive into Dallas at all.”

Many of these older, well-established suburbs have century-old trees lining their streets, which is very attractive to people, he says, partly because they’re not native to Texas.

For 2022, “I see a continuation of what we’re seeing now, especially in the affluent suburbs,” Randall says. “This isn’t coming to a halt any time soon.”

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